Aid groups worry new US anti-terror law could leave them liable

A new US anti-terror law that has forced the majority of American-funded aid operations in the Occupied Palestinian Territories to grind to a halt may have even wider humanitarian consequences, leaving nonprofits around the world more vulnerable to litigation.

While the 700-word bill appears to have been targeted at the Palestinian Authority, which governs the West Bank, experts say the Anti-Terrorism Clarification Act, or ATCA, is poorly crafted and could result in some non-governmental organisations and businesses being reluctant to take US funding or be associated with US-financed programmes.

Signed in October last year and law as of 31 January, ATCA is an attempt by US lawmakers to make it easier for American courts to hear civil suits related to terrorist attacks abroad, specifically those involving authorities tied to the Occupied Palestinian Territories.

Under ATCA, recipients of three kinds of aid � economic support funds (ESF), international narcotics and law enforcement (INCLE) funds, and financing earmarked for nonproliferation, anti-terrorism, and demining (NADR) � become subject to US personal jurisdiction.

This means American citizens who have demonstrably suffered injury to person, property or business from international acts of terrorism can sue these recipients in US civil court. American NGOs that operate abroad were already subject to personal jurisdiction for such suits, but ATCA broadens this to any recipient.

There is a real risk that this could really cripple the US' ability to find reliable foreign assistance partners in a lot of parts of the world where we really need them, particularly areas of conflict.

As a result of the law, the Palestinian Authority (PA) announced it would stop taking those forms of aid, leading the US Agency for International Development (USAID) to shut down its operations in the West Bank and Gaza in February. Other NGOs that receive funding via USAID and from the streams mentioned in ATCA followed suit.

While the bill has so far only caused the shutdown of NGOs working in the West Bank and Gaza, there is no geographical limit in its wording. Experts, including Scott Anderson, a fellow at the Brookings Institution who has written extensively about the law and advised aid groups on its legal ramifications, say this means ATCA could have unintended and far-reaching consequences.

There is a real risk that this could really cripple the US' ability to find reliable foreign assistance partners in a lot of parts of the world where we really need them, particularly areas of conflict, he said.

ATCA's birth and immediate impact

In 2015, a court awarded hundreds of millions of dollars in damages to 10 families who were American victims or related to victims of terrorist attacks in the early 2000s. They argued that the PA and the Palestine Liberation Organisation, both headed by President Mahmoud Abbas, had offered financial support to the attackers and their families, running afoul of the US Anti-Terrorism Act (ATA).

The ruling was overturned, in part because even though the victims and plaintiffs held American citizenship, a higher court said the PLO and the PA couldn't be sued in the US court system for attacks planned and carried out entirely outside American borders.

Sponsored by Senator Chuck Grassley, ATCA, which clarifies the ATA, was largely the result of a campaign by the plaintiffs and their lawyers to allow Americans to do just that. After the bill passed, Grassley cited the case against the PA and the PLO: Carrying out or assisting an act of international terrorism that injures or kills Americans abroad should provide sufficient justification to subject defendants to US legal sanctions, his office said in a statement.

The Palestinian Authority has received all three types of ATCA-specified aid in recent years. Unwilling to risk liability under the new law and a possible reactivation of earlier lawsuits against it, the PA told the United States in December that it would stop taking US funds from the three streams. It also ordered any NGOs using such funding to end their work in the Occupied Palestinian Territories. Programming carried out by USAID-funded NGOs, including a planned rehabilitation of Gaza's water system, have been halted.

Eric Garduno, senior policy and legislative specialist at Catholic Relief Services, said all USAID-funded work on his organisation's Envision Gaza 2020 programme � through which it provided food to more than 3,000 households � ended entirely when ATCA came into force.

Garduno said 3,000 households was already well below their goal � due to previous US budget cuts and administration scrutiny � and added that he didn't know how many people Catholic Relief Services would now be able to feed.

We are in sort of a limbo right now where we think at least some of the programmes that were closed on January 31 can be restarted if there is a change to ATCA, but I don't know how quickly a change can happen now, said Garduno. We do know the longer this is delayed, the less likely any of these programmes will be restarted.

All of this comes at a sensitive time for NGOs working in the Palestinian territories, after a pro-Israel activist used another US law, the False Claims Act, to seek damages � successfully in at least one case � from nonprofits on the basis that their interaction with US terrorist-designated groups may amount to material support.

Wider impact

Overall, ESF, INCLE, and NADR funding totalled more than $6 billion in the last financial year and was received in more than 50 countries, including fragile humanitarian situations such as Afghanistan, Iraq, Nigeria, and Yemen.

The funds cover a wide range of activities, from sanitation to law enforcement. INCLE funds that have paid for security assistance in the West Bank have also been spent in countries like Afghanistan, Colombia, and Pakistan to combat the drug trade and finance other security measures.

Once people become aware of this, either they won't want the US money, or they won't want to do work in the rough and tumble neighbourhoods where we want them.

Courts will ultimately decide the breadth of the new law, but analysts say the lack of geographical specificity in ATCA means aid organisations or subcontractors that receive ESF, INCLE, or NADR funding � either directly or indirectly � could be left open to lawsuits if they implement programming in areas where US-designated groups such as the Taliban, al-Qaeda, or al-Qaeda affiliates like al-Shabaab operate. This may be true even if the only US funding they receive is for unconnected operations in a different country to the one where the ATCA and ATA-prohibited programming is being conducted.

There are partners that don't have a US [base of some sort] that do get US foreign assistance on a pretty regular basis � usually subcontractors, said Hady Amr, a former senior US diplomat who managed a $1.6 billion aid budget for the Middle East as deputy senior administrator at USAID. Once people become aware of this, either they won't want the US money, or they won't want to do work in the rough and tumble neighbourhoods where we want them.

Kay Guinane, director of the Charity & Security Network, a group that coordinates nonprofits on regulatory issues, said foreign-based NGOs expressed concern in recent meetings that they may be vulnerable to lawsuits because of ATCA, and would not have the financial means to fight in court. She said the vagueness in US law over what constitutes material support for terrorist action, exacerbated by ATCA, had added to this anxiety.

Few aid groups are willing to talk openly about the issue. NGOs would be foolish to speak publicly about concerns with ATCA, said Lara Friedman, president of the Foundation for Middle East Peace. Doing so would be the equivalent of painting a bullseye on their backs at which lawyers and potential litigants looking for targets [could] take aim.

"It's a hypothetical for now, but it's not paranoid to see [ATCA] as a very real potential threat, Friedman said. "The potential use of this as a [legal] tool is only limited by the number of cases of US citizens injured overseas and the creativity of lawyers who in finding NGOs to sue."

Neither USAID nor the US State Department responded to questions about whether they were using language in contracts � or warning partners in any other way � about the new implications of receiving ESF, INCLE, and NADR funding.

The assumption within a large part of the NGO community is that this could have a chilling effect on non-US or local NGOs who are willing to accept US assistance, said Joel Braunold, executive director of the Alliance for Middle East Peace.

Clarification

While the NGO community waits to see what the full impact of ATCA will be, there have been unsuccessful attempts on the US side to adjust the law's wording, especially since the PA stopped taking funding for security coordination with Israel, which includes aid to Palestinian security forces working with Israel on counter-terrorism measures.

We learned that no one on Capitol Hill thought ATCA would be interpreted in a way that would force NGO programmes to close, said Garduno of Catholic Relief Services.

NGOs hoped Congress would deliver a fix in the spending package President Donald Trump signed last month, but this didn't happen and legislators have so far failed to amend the law.

That doesn't necessarily mean a change of some sort isn't on the cards. A spokesperson for Grassley told IRIN was still willing to further clarify the law his office drafted, but said the senator blamed the State Department for only raising concerns about US assistance after the legislation had passed. The State Department declined to comment.

A lot of people, including the Trump administration, recognise the real problems here, said Anderson of Brookings. The broader question is whether there is going to be a fix for the broader impact this will have outside the West Bank.